‘Good Actor’ YouTube in Strong Position Against Viacom Copyright Lawsuit, Says Defendant’s Attorney

Internet defendants considered “good guys” win infringement challenges with the benefit of the Digital Millennium Copyright Act’s (DMCA) safe harbor for service providers, agreed Jonathan Gottlieb, litigation senior vice president for the Fox Entertainment Group. A defendant considered a bad actor, like Napster or Grokster, loses, they said. The outcomes of the cases seem to be based at least on the judges’ opinions of the defendants’ business models, they and moderator Ian Ballon of Greenberg Traurig said.

Viacom’s argument for partial summary judgment, unsealed last week, “read to me” as if the company read a decision on remand in a major P2P case and had proceeded “to plug in evidence that YouTube is a video Grokster,” Lacavera said. This required “blatant misrepresentation of the underlying evidence,” she said. A Viacom spokesman said he didn’t know the context of the statement and he had no comment right away.

Gottlieb said Viacom is trying to push YouTube out of the protected circle in their case. Content owners contend that sites “overrun” with infringing material must be liable despite DMCA protections, he said. “Whether or not the court decides that YouTube is such an animal” is central to Viacom’s case, Gottlieb said. In general, “willful blindness” to infringement can be considered knowledge of the activity, “and enough knowledge can rise to the level of intent” to allow it, he said.

But “there’s more clarity than there has been at any time” previously about what an Internet site operator must know to be liable for infringement without getting a takedown notice from a copyright owner, Gottlieb acknowledged, and it isn’t favorable to plaintiffs. “The UMG-Veoh case made it very difficult to find a red flag,” and the law may not recognize that there is such a thing, he said. That state of affairs is “subject to being upended” if the 9th U.S. Circuit Court of Appeals in San Francisco reverses the trial judge in Veoh or if the 2nd Circuit takes a different view in Viacom’s case against YouTube, which the trial judge hasn’t decided, Gottlieb said.

"The notion that you could recognize a copyright infringement” without knowing who posted material or why and be required to take it down “proactively doesn’t apply,” Lacavera said: “The law has reached the point where it’s consistent with the practical realities” for Internet companies. The 9th Circuit has made most of the law in this field, Ballon said. Copyright owners have been rebuffed in efforts to shift to Internet companies the burden of preventing infringement, he said.

The law “has gone too far” with a ruling last month that Universal Music Group must pay attorney’s fees and damages for an illegitimate DMCA takedown notice in what’s called the dancing-baby video case, Gottlieb said. “The idea that you might be liable” under the Lenz case ruling by U.S. District Judge Jeremy Fogel in San Jose, Calif., “for making a bad judgment” on fair use “is very troubling,” Gottlieb said. But Fogel’s limitation of damages to those from the notice, excluding those from any lawsuit later, “may stem the volume of litigation” that has reached “a fair amount” since 2008, particularly claims filed by defendants themselves.

Universal Music, a leader among the few entertainment companies that have aggressively prosecuted digital copyright cases, seems to have overplayed its hand, the lawyers said. The way U.S. District Judge Howard Matz wrote a ruling last fall against throwing out the label’s case against Veoh shows that he “was reaching to get rid” of Universal after hearing a string of infringement cases by it, Gottlieb said. The label’s arguments got the “back of the hand” in a decision making clear the judge’s frustration, he said. Lacavera said, “I can see that thread.” Bannon said Universal had “raised so many arguments that some their better arguments got lost in the shuffle.”